Know your digital customer

Know Your Customer (KYC) rules protect your financial institution from fraudulent and illegal activities—and you’re required to comply. But in the digital world, where you may never meet your customer, this can become a barrier to customer satisfaction, or an opportunity for closer engagement.

Playing by the KYC Rules

KYC guidelines arose from the Patriot Act in 2001.  They require financial institutions to put in place controls that help them manage their risks, and protect them from being used in money laundering schemes.

Financial institutions have implemented multiple responses to KYC, including: Customer Identification Programs, transaction monitoring, name matching, OFAC checks, and behavior profiling controls. All these are designed to track personal, account and financial information, in order to establish the required “reasonable belief that it knows the true identity of each customer.”

Uniquely Digital Challenges

More and more banks and credit unions seek to attract and retain customers by offering digital account opening and loan applications. Identity verification becomes a challenge, as fraudsters create synthetic identities that combine real and fabricated information.


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